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Financial Highlights**

(MILLIONS OF DOLLARS, EXCEPT
PER-SHARE AMOUNTS)
2012 (1) 2011 (1) 2010 (1) 2009 2008
SWK
Revenue $ 10,190.5 $ 9,435.5 $ 7,496.9 $ 3,481.6 $ 4,135.6
Gross Margin $ 3,734.2 $ 3,489.6 $ 2,836.3 $ 1,416.3 $ 1,567.7
Gross Margin % 36.6% 37.0% 37.8% 40.7% 37.9%
Working Capital Turns 7.5 7.2 5.9 7.9 5.9
Free Cash Flow* $ 1,059 $ 1,004 $ 936 $ 443 $ 422
Diluted EPS from $ 4.67 $ 4.61 $ 3.53 $ 2.62 $ 2.52
  Continuing Operations
CDIY
Revenue $ 5,193.7 $ 5,007.6 $ 4,147.6 $ 1,258.1 $ 1,608.4
Segment Profit $ 762.4 $ 654.6 $ 542.8 $ 137.3 $ 170.3
Segment Profit % 14.7% 13.1% 13.1% 10.9% 10.6%
Security
Revenue $ 2,428.9 $ 1,926.5 $ 1,457.6 $ 1,342.3 $ 1,260.1
Segment Profit $ 346.9 $ 312.4 $ 252.9 $ 282.1 $ 248.3
Segment Profit % 14.3% 16.2% 17.4% 21.0% 19.7%
Industrial
Revenue $ 2,567.9 $ 2,501.4 $ 1,891.7 $ 881.2 $ 1,267.1
Segment Profit $ 418.1 $ 410.1 $ 282.1 $ 99.4 $ 171.8
Segment Profit % 16.3% 16.4% 14.9% 11.3% 13.6%

(1) Excludes merger and acquisition-related charges and payments.

*Free Cash Flow = Net cash provided by operating activities minus capital expenditures. In 2012, 2011 and 2010, free cash flow excludes $479 million, $307 million and $382 million, respectively, of merger and acquisition-related charges and payments incurred primarily in connection with the Black & Decker merger and acquisition of Niscayah. Such normalized free cash flow is considered a meaningful metric to aid the understanding of the Company's cash flow performance aside from the material impact of these merger and acquisition-related payments. In 2008, free cash flow also excludes income taxes paid on the gain from the CST/Berger divesture due to the fact the taxes are non-recurring and the related gross cash proceeds are classified as investing inflows. Refer to page 30 in the enclosed 10-K for the reconciliation of operating cash flow to free cash flow.
**In December 2012, the Company sold its Hardware & Home Improvement business. The results from 2008–2011 were recast for this divestiture, for comparability.